In what is going to be a big co-branding exercise, Virgin Mobile may tie up with about as many as 50 brands in the country. Virgin Mobile, Richard Branson-led Virgin Group’s mobile brand, in an attempt to firmly establish itself in Indian market, is in talks to link up with brands from sectors like apparel, restaurants, electronics and even consumer goods. With this initiative Virgin aims to gain ground majorly into the youth market as it hopes these tie-ups with ‘youthful’ brands will serve it to increase its reach to the younger generation. The company had earlier claimed it planned to acquire 10 per cent market share among the youth.
“The idea is to connect with the youth and be a part of brands that they identify with. If you look at the telecom market now, there is no compelling reason why a customer should stay with an operator. If Virgin also gives the standard telecom offerings, we will not be able to retain a customer. The idea of this is to go beyond the same old telecom tariff offerings and create a brand value and brand loyalty,” said a top official from Virgin Mobile.
The company has narrowed down its target age group to about 16-26 as it feels its new marketing strategy will find better reception in this age group. Sources revealed that the investment involved in this exercise would be somewhere around Rs. 150-200 crores. However this cost would not be incurred by Virgin group alone. The brands getting tied up with Virgin for this co-branding exercise will also be bearing a part of it. This has been done to ensure that no company gets away with all the profits (or has to bear the entire loss) and would help all the involved parties to get mutual benefit.
It may be worth mentioning here that co-branding is nothing new to Virgin Mobile. It already has a brand franchise with Tata Teleservices. According to the marketing alliance, Virgin Mobiles uses Tata’s spectrum to offer its services branded under its name. It offers both GSM and CDMA services and currently operates across 14 circles like Mumbai, Maharashtra, UP, Punjab and Haryana.
You may recall that Virgin Mobiles had turned Indian telecom industry on its head by starting innovative schemes like where every consumer getting 10 paise credit for an incoming call. This new strategy definitely seems an interesting one but will India respond favourably?
